Sarwa - The first regulated hybrid robo-advisor in the region catering to young professionals - has launched its Halal and Socially Responsible Investing (SRI) portfolios and has lowered the minimum to open up an account to US$ 500.
The company’s mission is to change the common belief that investing is a luxury by democratizing it and making it available to everyone. Sarwa simplifies the tools that traditional investors usually use, allowing anyone to open an account, and start investing and growing their wealth. As
part of their philosophy, Sarwa encourages its clients to follow a few simple rules - start early, avoid high fees and stay disciplined.
Investors today look for value-based investing without compromising the performance of their portfolios. Through the newly launched products, Sarwa allows anyone to invest while staying true to their values and cultures - this includes investing in well-diversified socially responsible products and halal portfolios.
Invest in your values
“At Sarwa, we believe that people should be able to invest in their values as well as their goals. With both Halal and SRI portfolios, they now have the ability to do so. We’re so excited to launch these in the region after all the demand we received from the GCC and expat investor community,” Said Mark Chahwan, Co-founder and CEO of Sarwa. “Being based in the UAE and serving the MENA region, the market for Halal portfolios is large but underserved. We realized there was a gap in the market, and we wanted to seize the opportunity to simplify their financial lives with the same philosophy and client service.”
Sarwa’s halal portfolios are created specifically for those complying with Islamic laws. They consist of a globally diversified portfolio of Blackrock Index-tracking exchange traded funds (ETFs) that exclude companies profiting from industries that contradict Islamic values such as alcohol, gambling, tobacco, pork, interest and others.
The all-equity portfolio, which uses the same passive investment strategy as Sarwa’s other portfolios, is comprised of thousands of stocks designed to maximize diversification and closely track indices such as the US market, emerging markets and other asset classes.
Traditionally in the region, financial firms have focused on only one segment of the market. Building a more inclusive platform is more cost efficient, allowing Sarwa to shift these savings to their clients to achieve better returns. ‘This will open up the dialogue between all nationalities and religions on money and investing, which is sometimes still seen as taboo in the region”, added Chahwan.
Socially Responsible Investing (SRI) Portfolios
In addition to halal portfolios, Sarwa also launched Socially Responsible Investing portfolios which offer a low-cost, diversified way for people to invest while knowing their money is being invested in socially conscious initiatives from around the world. These portfolios comprise Vanguard and Blackrock ETFs with companies that make social responsibility a priority.
“Sarwa is disrupting the traditional financial advisory industry by offering full fee transparency, minimal initial capital requirements and therefore making investing accessible to everyone.” Added Walid Mansour, Partner, Middle East Venture Partner. “With the introduction of Socially Responsible and Halal portfolios, Sarwa is becoming a robust investment platform catering to the previously unmet needs of a large emerging affluent segment. We are excited to be part of Sarwa’s growth story and look forward to the journey ahead.”
“The Sarwa team is continuously proving that they have their clients' needs at heart. The newly launched portfolios will allow socially conscious and value-driven individuals to invest without compromising on fees nor returns.” Said Sharif El-Badawi, Partner, 500 Startups. “Many financial products currently offered in the market are off the table for observant Muslims as well as impact driven investors, and the available options are expensive or have high minimums. Sarwa now offers portfolios that have all the benefits they provide while being compliant with Islamic investing practices as well as socially responsible practices. This is great news for the region."
Sarwa’s SRI portfolios limit exposure to companies that have a negative social impact while growing exposure to companies that have a positive one. These companies meet SRI criteria by focusing on environmentally sustainable practices and fair labor standards, among others. Investing in SRI portfolios will not hurt returns as they have a 99% correlation with conventional portfolios.
Lower account minimum
The robo-advisor also lowered the account opening minimums. Users can now start investing at only $500, where it was previously $2,500.
“The reason we started Sarwa in the first place was to democratize investing and make it accessible to everyone. Traditional investors only accept clients with a minimum of $100,000 to open an account. We don’t agree with that and want to be able to serve young investors who are building their careers. We also know that clients want to try us out first to experience the service. By bringing down the account minimum to $500, they can do so now. ” - Mark Chahwan